What changed in this filing

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Item 1. Financial Statements

2020-08-04 compared with 2020-05-05 · 61 added, 32 removed, 293 unchanged (24% of the section changed)

35 unchanged sentences

Additional paid in capital

Treasury shares at cost (4,437,439 and 4,437,439 shares, respectively)

Treasury shares at cost ( 4,437,439 shares)

Retained earnings

6 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

8 unchanged sentences

Income before income taxes

Income tax benefit

Income tax expense (benefit)

Net income per share:

4 unchanged sentences

(dollars in thousands)

For the three months ending March 27, 2020

For the three months ending June 26, 2020

Ordinary Shares

Shareholders'

Balance at March 27, 2020

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Share-based compensation expense

Balance at June 26, 2020

For the six months ending June 26, 2020

Ordinary Shares

Shareholders'

Balance at December 27, 2019

3 unchanged sentences

Share-based compensation expense

Balance at June 26, 2020

ICHOR HOLDINGS, LTD.

Consolidated Statements of Shareholders’ Equity (continued)

(dollars in thousands)

For the three months ending June 28, 2019

Ordinary Shares

Shareholders'

Balance at March 29, 2019

For the three months ending March 29, 2019

Ordinary shares issued from exercise of stock options

Ordinary shares issued from vesting of restricted share units

Share-based compensation expense

Balance at June 28, 2019

For the six months ending June 28, 2019

Ordinary Shares

6 unchanged sentences

Share-based compensation expense

Balance at March 29, 2019

Balance at June 28, 2019

See accompanying notes.

IC HOR HOLDINGS, LTD.

ICHOR HOLDINGS, LTD.

Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

9 unchanged sentences

Other liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Capital expenditures

Cash paid for intangible assets

Net cash used in investing activities

26 unchanged sentences

We use a 52- or 53-week fiscal year ending on the last Friday in December.

The three months ended March 27, 2020 and March 29, 2019 were both 13 weeks.

References to the first quarter of 2020 and 2019 refer to the three-month periods then ended .

The three months ended June 26, 2020 and June 28, 2019 were both 13 weeks.

References to the second quarter of 2020 and 2019 refer to the three-month periods then ended .

References to fiscal year 2020 refer to our fiscal year ending December 25, 2020.

27 unchanged sentences

The ultimate resolution of these actions is not expected to have a material effect on our financial position or results of operations.

Subsequent to the end of the first quarter, but before these financial statements were issued, we reached a mutual settlement with the counterparty of a contract dispute and, accordingly, recorded a $1.4 million contract settlement loss to cost of sales, as the settlement provided evidence relating to a loss that existed at March 27, 2020.

Subsequent to the end of the first quarter, but before the financial statements were issued, we reached a mutual settlement with the counterparty of a contract dispute and, accordingly, recorded a $ 1.4 million contract settlement loss to cost of sales, as the settlement provided evidence relating to a loss that existed at March 27, 2020.

Accounting Pronouncements Recently Adopted

22 unchanged sentences

Total property and equipment, net

Depreciation expense was $2.4 million and $2.1 million for the first quarter of 2020 and 2019, respectively.

Depreciation expense was $ 2.6 million and $ 2.0 million for the second quarter of 2020 and 2019, respectively, and $ 5.0 million and $ 4.1 million for the six months ended June 26, 2020 and June 28, 2019, respectively.

Note 4 – Intangible Assets

Definite‑lived intangible assets consist of the following:

March 27, 2020

June 26, 2020

Customer relationships

14 unchanged sentences

As these amounts are variable, they are not included in lease liabilities.

As of March 27, 2020, we had no operating leases executed for which the rental period had not yet commenced.

As of June 26, 2020, we had no operating leases executed for which the rental period had not yet commenced.

The components of lease expense are as follows:

Three Months Ended

Six Months Ended

Operating lease cost

Supplemental cash flow information related to leases is as follows:

Three Months Ended

Six Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Supplemental balance sheet information related to leases is as follows:

Weighted-average remaining lease term of operating leases

Weighted-average discount rate of operating leases

Future minimum lease payments under non-cancelable leases as of March 27 , 20 20 are as follows:

Future minimum lease payments under non-cancelable leases as of June 26, 2020 are as follows:

2020, remaining

15 unchanged sentences

Three Months Ended

Income tax benefit

Six Months Ended

Income tax expense (benefit)

Income before income taxes

Effective income tax rate

Our effective tax rate for the first quarter of 2020 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate and the release of the certain tax reserves related to statute of limitation expirations and settlements, excess tax benefits from share-based compensation and the impact of the CARES Act.

Our effective tax rate for the first quarter of 2019 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

Our effective tax rate for the three and six months ended June 26, 2020 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate, excess tax benefits from share-based compensation, and the impact of the CARES Act.

Our effective tax rate for the second quarter of 2019 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate and excess tax benefits from share-based compensation.

Our effective tax rate for the six months ended June 28, 2019 differs from the statutory rate due to taxes on foreign income that differ from the U.S.

tax rate, the release of certain tax reserves related to statute of limitation expirations and settlements, and excess tax benefits from share-based compensation.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $2.1 million at March 27, 2020.

The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $ 2.3 million at June 26, 2020.

The related interest and penalties were zero and $ 0.4 million, respectively.

The uncertain tax positions that are reasonably possible to decrease in the next twelve months are insignificant.

As of March 27, 2020, we were not under examination by tax authorities.

As of June 26, 2020, we were not under examination by tax authorities.

Note 7 – Employee Benefit Programs

2 unchanged sentences

Eligible employees receive a discretionary matching contribution equal to 50 % of a participant’s deferral, up to an annual maximum of 4 % of a participant’s annual compensation.

Matching contributions were $0.5 million and $0.4 million for the first quarter of 2020 and 2019, respectively.

Matching contributions were $ 0.5 million and $ 0.4 million for the second quarter of 2020 and 2019, respectively, and $ 1.0 million and $ 0.8 million for the six months ended June 26, 2020 and June 28, 2019, respectively.

Note 8 – Long-Term Debt

17 unchanged sentences

Eurodollar interest payments are due on the last day of the applicable interest period.

At March 27, 2020, the term loan and revolving credit facility bore interest at the Eurodollar rate option of 4.44% and 4.19%, respectively.

At June 26, 2020, the term loan and revolving credit facility bore interest at the Eurodollar rate option of 3.95 % and 3.68 %, respectively .

Term loan principal payments of $ 2.2 million are due on a quarterly basis.

7 unchanged sentences

Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares were never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $2.9 million and $1.3 million for the first quarter of 2020 and 2019, respectively.

Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $ 2.1 million and $ 1.5 million for the second quarter of 2020 and 2019, respectively, and $ 5.0 million and $ 2.8 million for the six months ended June 26, 2020 and June 28, 2019, respectively.

Stock Options

7 unchanged sentences

Forfeited or expired

Outstanding, March 27, 2020

Exercisable, March 27, 2020

Outstanding, June 26, 2020

Exercisable, June 26, 2020

Restricted Share Units

3 unchanged sentences

Unvested, December 27, 2019

Unvested, March 27, 2020

Unvested, June 26, 2020

Employee Share Purchase Plan

2 unchanged sentences

Shares are purchased on the last day of the purchase period.

During the first quarter of 2020, 16,520 ordinary shares were purchased by eligible employees under the 2017 ESPP.

As of March 27, 2020, approximately 2.4 million ordinary shares remain available for purchase under the 2017 ESPP.

During the six months ended June 26, 2020, 16,520 ordinary shares were purchased by eligible employees under the 2017 ESPP.

As of June 26, 2020, approximately 2.4 million ordinary shares remain available for purchase under the 2017 ESPP.

Note 10 – Segment Information

8 unchanged sentences

Three Months Ended

Six Months Ended

United States of America

Total net sales

Foreign long-lived assets, exclusive of deferred tax assets, were $ 29.0 million and $ 30.3 million at June 26, 2020 and December 27, 2019, respectively .

Note 11 – Earnings per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Basic weighted average ordinary shares outstanding

4 unchanged sentences

Earnings per share:

A combined total of approximately 720,000 and 1,320,000 potentially dilutive options and RSUs were excluded from the calculation of net income per share for the first quarter of 2020 and 2019, respectively, because including them would have been antidilutive under the treasury stock method.

A combined total of approximately 1,790,000 , 1,782,000 , 1,555,000 , and 1,890,000 potentially dilutive options and RSUs were excluded from the calculation of net income per share for the second quarter of 2020 and 2019 and the six months ended June 26, 2020 and June 28, 2019, respectively, because including them would have been antidilutive under the treasury stock method.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements